Constructing an assessment framework for environmental and economic impacts of product price increase associated with product lifetime extension design policy

Policies and measures for achieving a sustainable society have been proposed and established, one of which is to encourage longer product use through product design improvements described in the EU action plan for circular economy by European Commission (2015). Such product design improvements for longer product use probably require high-quality materials and retention and management of repair parts. These will lead to increase in production and management costs. Accordingly, the product design improvements for longer product use will also lead to product price increase which can be an incentive for longer product use. Therefore, analyzing impacts of product price increases on environment and economy in advance is beneficial to discuss achievements of a sustainable society. This study proposes an analytical framework for environmental and economic impacts of product price increases with a dynamic discrete choice model. Focusing on air conditioners in Japan as a case study, this study estimates impacts of the product price increase on product replacements of air conditioners. Based on the results, this study analyzed environmental (material consumptions and GHG emissions) and economic (monetary sales of air conditioners) impacts of the product price increase, and a trade-off among effects of the product price increase on the three factors are clarified.